D-Bell, aka Minor Machman, has a growing email list of those who want Statewide Tax Reform. This blog site is a compilation of his research. His efforts originated in Huntsville, but have expanded to Ogden Valley, Weber County and the entire state of Utah

Saturday, January 5, 2008

Series: Post #2 Meet the middleman for the Realtor Association Lobby.

Bryan R. KohlerEducationBryan received his Political Science degree from the University of Utah. He then earned his MBA and Juris Doctorate degree from Willamette University in Salem, Oregon.ExperienceHe has served as CEO for the Salt Lake Board of Realtors since August 2002. Bryan's duties include serving as Executive Vice President, directing the 14 person professional staff and managing the budget. He also directs the board's Governmental Affair Committee that is responsible for developing cooperative relationships with local and state officials. Prior to his appointment with the Salt Lake Board, Bryan was a practicing attorney with Gallian, Westfall, Wilcox & Welker in St. George Utah. While with this law firm he specialized in government affairs and employment laws. He is a member of the Utah State Bar Association.

Mr. Kohler is the middle man of the trio of Realtor Association Lobbyists and apparently as the Executive Vice President is responsible for directing the Board of Realtors Governmental Affairs Committee which develops “cooperative relationships” with local and state officials. These “cooperative relationships” with local and state officials are at the core of the problems for us taxpayers.

This symbiosis between business interests and government, this teaming and “relationship” has been and continues to be very bad news for taxpayers. For it is truly a sad situation when business and government team up in their own best interests.

Mr. Kohler appeared briefly before the 19 September 2007 Revenue and Taxation Interim Committee and gave the following statement:(direct transcript from audio of committee meeting)“I am Bryan Kohler. I am a Sandy resident. While I’m not here today to tell you the property tax system is completely broken. But the Realtors have always said that the property tax system should be fair, consistent, evenly applied and that there be truth in taxation. As a watchdog group for homeowners, the Realtors have everything to lose if properties become unaffordable or if difficult to transfer. And that’s why we fought for years to keep property taxes low. We appreciate what this committee is taking on and we’ll support any and all legislation that keeps the property tax burden low for its citizens.

No one should be forced out of a home that they own. Especially because of taxes and we also understand that the elderly are particularly at risk. And that’s been said today so I won’t go into that. Obviously the market determines the value of a home and the value affects the taxes that are collected. And certain areas get popular and burdens shift as its been said today. Obviously everyone knows this, but the taxes collected don’t go up or down, it just shifts depending on what areas might be hot, for example. Homeowners often received that value and they do even though they are taxed on it, they are receiving a value. But they often can’t afford the value that is being I guess being foisted upon them. This is why Realtors have consistently spoken against tying the tax rate to the mill rate or tying the rate to inflation. We’ve fought those measures when they have been brought up here because they would escalate property taxes for citizens. We don’t want that.

Is the system completely broken? We don’t believe that’s the case. We believe that there are some options here that we can use. And ah, I just. I’m thinking particularly of what we do with Greenbelt. We value that area and we basically say we will forbear; we will defer taxes on Greenbelt property until transfer. And maybe that’s a solution that we could employ especially with groups like the elderly. Defer the taxes until they transfer it, so they don’t get taxed out of their homes. Cause we certainly don’t want that. Thanks for your time, committee.”

The bill goes on to allow property taxes for applicants over 70 years of age to be deferred and bear an interest rate equal to the lesser of; 6%; or the federal-funds rate target as established by the Federal Open Markets Committee…per year.

Friends and Neighbors,

You may think this is a good deal. But I don’t. About twenty-five states have some form of this type property tax deferral system. And from what data is available most seniors would rather self euthanize than take advantage of this type of “relief”. They would rather commit suicide than burden their beloved family with such objectionable tax “reform”. The AARP does not support such legislation nor is it generally widely accepted as a viable and humane alternative.

Tax deferral proposed by the Realtor Association is clearly another scheme to virtually force the turnover of properties, at significantly increased prices, due to compounded 6% interest penalties on back taxes, which increase prices, which increase commissions, which flow into Realtors’ pockets when we die.

Ironically, suggesting using “Greenbelt” as a procedural precedent draws attention to an area which has remained virtually unchanged since the 1960s. (I hope anyone who owns and actually farms Greenbelt property within the intend and letter of the law will understand I am NOT referring to you or yours.) “Greenbelt” has been manipulated into property tax evasive safe harbors used primarily by people who own land more than five acres (5.25 acres if a primary residence rests on it). Developers carve out five acre plots to take advantage of the massive loophole. By law, the property is supposed to be engaged in some form of crop production. But with only one State Tax Commission agent to enforce this, it is commonly abused. That agent told me recently they must send a prior notice (warning notice) to the landowner announcing they are coming to do an “audit”. And frequently by the time the agent arrives there is a cow or two on the otherwise barren property.

Want specifics? Want an example? An Ogden Valley developer hires a local farmer to cut and bale his weeds and field grasses for the sake of the greenbelt tax rate. The farmer “harvests” the “crop”, bales it,…and then throws it away. This is but one of many tax evasion schemes used by property owners and developers.

To add insult to injury, our legislature passed a law not long ago which entitled these same non farming or “tax-evader farmers” to keep “pleasure horses” on their Greenbelt properties and qualify as “crop production activity”. I did not know we ate horse meat, but if the taxes continue it may be the only thing left we can afford. Allowing "pleasure horses" to qualify land for greenbelt is purely "botique legislation" designed for special interests without any consideration for "the little people" or majority of taxpayer constituents.

Those who hold FAA or Greenbelt acreage are paying about fifteen pennies (15 cents) an acre. When sold or “transferred” the new owner must pay five years back taxes at the “taxable market value”.

This of course is a huge boondoggle for the larger non-farmer land owners. They can hold onto large tracts of land for twenty or thirty years, paying $100 a year on 700 acres valued eventually into the millions of dollars on purely investment properties, for example. And when sold/transferred the new owner pays only the last five years at much higher taxable market value. The cost to the community of having the other fifteen or twenty-five years taxed at only eight to fifteen cents an acre at the FAA "taxable market value", even though the "current market value" is into the millions, ultimately is paid by you and me. We squeeze and sacrifice to pay exhorbitant property taxes while these "sleeze bags" skate by for pennies an acre using a major loophole and tax evasion scheme.

In the old days out West, chickens would be plucked, tar melted and a fence rail located for a "Tar and Feather Party" and these folks would have a free ride out of Town. Today they hide among us quietly not appealing their property taxes for fear of jeopardizing their "private good deals" with the Tax Commission and County Assessors rendereed into "toothless dogs" by bad legislation and laws.

Every County Assessor and State Tax Commission person I have spoken with agrees that THIS (Greenbelt abuse and tax evasion) is the worst tax travesty in our State, when it comes to the “shifts” of tax burdens onto the back of us homeowners.

Folks this is one of the ways our legislators have allowed the Realtor/Developer lobby community to “shift” tax evaders and cheats significant tax burden onto you and me. And this is what we must change among many other things wrong with our current tax system. Stay tuned there is more….much more.

2 comments:

I have a feeling that the Machman is going to expose this whole organization from the top down. And i think we need to seriously think about who we elect to the County Commissions, City and Town Councils, and especially to the Utah State Senate and House. If they are realitors or developer people we should blackball them by making sure no one will vote for any of them.